Time and Manner of Lodging an Objection Every taxpayer who is not satisfied with an assessment or a decision made by the Commissioner may lodge an objection in terms of the following provisions: Section 62 of the Income Tax Act [Chapter 23:06] as read with the 11th Schedule to the same Act Section 25 of the Capital Gains Tax (CGT) Act [Chapter 23:01] Section 32 of the Value Added Tax (VAT) Act [Chapter 23:12] The decisions issued by the Commissioner which can be objected to are clearly stated in the three Acts listed above. Time frame to lodge an objection The objection should be lodged within Thirty (30) days after the date of the notice of assessment or of the written notification of the decision or determination. No objection shall be processed by the Commissioner if not delivered at his office or posted to him in sufficient time on or before the last day of the prescribed thirty days, unless the taxpayer satisfies the Commissioner that reasonable grounds exist for delay in lodging his objection.   Manner of lodging the objection The objection should be in writing and should specify in detail the grounds of objections upon which the objection is being made. The Commissioner will communicate the decision made after consideration of the stated grounds of objection. If the Commissioner has not notified the person who lodged the objection of his decision within Three (3) months after receiving the notice of objection, or within such longer period as the Commissioner and that person may agree, the objection shall be deemed to have been disallowed. If the objection is disallowed and the taxpayer is still aggrieved of the outcome, an appeal can be made to the Special Court in terms of Section 65 of the Income Tax Act (Chapter 23:06) or Fiscal Appeals Court in terms Section 33 of the Value Added Tax Act (Chapter23:12). Payment of tax pending decision on objection and appeal The obligation to pay any tax, additional tax, penalty or interest chargeable shall not, unless the Commissioner so directs, be suspended by any objection or appeal pending the decision by the Commissioner or the court of law. If an assessment or decision is adjusted on appeal, a due adjustment shall be made, for which purpose amounts paid in excess shall be refunded and amounts short paid shall be recoverable with interest. All taxpayers should note, therefore, that the lodging of an objection does not set aside the requirement for the payment of taxes, penalties and interest as assessed. Stay safe. Always remember to sanitise, wash your hands with water and soap. My Taxes, My Duties: Building my Zimbabwe!!   Disclaimer This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.

According to Section 120 (1) (b) of the Customs and Excise Act Chapter 23:02 as read with Section 113(1) of Statutory Instrument 154 of 2001 (General Regulations) there is a rebate of duty on goods imported by a person engaged in the mining industry?

 

The rebate is granted only in respect of the following goods which are imported or taken out of Bond by persons engaged in the Mining Industry;

1. Eucalyptus, pine and other oils for use in the extraction of gold and other minerals by the flotation process;
2. Chemical substances, other than spirits, methylated spirits, fuel oils, lubricants and nitrate of lead, for use in any process for the concentration or refining of ore, or for assay or research purposes.

1. To benefit from this rebate, client should submit to the nearest ZIMRA office for onward transmission to the Regional office or direct to the Regional office, the documents listed below:
2. Application Letter

1. Letter of Undertaking to the effect that the articles shall be used solely for the purpose for which the rebate is granted and if they are sold or otherwise disposed of the duty rebated shall be paid forthwith to the Commissioner
2. Proforma Invoice showing the Full Description and Quantity of the Goods to be imported under the rebate
3. End User’s Certificate
4. A letter from the Mining Commission to Confirm the Existence of that Mine.
5. Current (Valid) Tax Clearance

At the time of the clearance of the goods, the importer shall be required to attach the Rebate Letter to the bill of entry form 21. The respective Regional Office shall issue a Rebate Letter specific to the Products listed in the Application and the Proforma Invoice.

What are Foreign Currency Designated Goods?

The government promulgated Statutory Instrument (SI) Number 252A of 2018 on 23 November 2018 which provides for the payment of duty for selected goods in any currency other than the bond notes in all its forms. For those designated goods, it therefore means that the importer shall pay any duty and import or value-added tax payable on such item in United States dollars. This article serves as a guidance to would be importers on whether electric vehicles pay duty in foreign or local currency. There has been a lot of misunderstanding on the classification and duty payment for electric vehicles.

What is an Electric Vehicle?

Electric vehicles are generally divided into all-electric or battery electric vehicles that run only on batteries, and plug in hybrids, that combine battery power with internal combustion engines. A common hybrid vehicle is the Honda Fit Hybrid. The popularity of electric vehicles has been expanding rapidly due to low or no fuel costs. There are three main types of electric vehicles (EVs), classed by the degree that electricity is used as their energy source:

• Hybrid Electric Vehicles (HEVs): HEVs are powered by both petrol and electricity
• Plug-in Hybrid Electric Vehicles (PHEVs): Also known as Extended-Range Electric Vehicles (EREVs), this type of EV is powered by both petrol and electricity
• Battery Electric Vehicles (BEVs): BEVs are fully electric vehicles, meaning they are only powered by electricity and do not have a petrol engine, fuel tank or exhaust pipe.

Does an electric vehicle pay duty in foreign currency or Zimbabwean Dollars?

The foreign currency value on importation shall be converted to Zimbabwean dollars at the international cross rate of exchange prevailing on the day of the conversion, where the duty shall be calculated upon and payable in local currency. The drag net for foreign currency designated goods includes all vehicles classified as luxury vehicles.

 

What is the classification of an electric vehicle?

Under customs harmonized systems classification such vehicles are classified on tariff 87034000 and 87035000.

 

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

 

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority. 

Rebate of duty on goods imported by a person engaged in the mining industry

According to Section 120 (1) (b) of the Customs and Excise Act Chapter 23:02 as read with Section 113(1) of Statutory Instrument 154 of 2001 (General Regulations) there is a rebate of duty on goods imported by a person engaged in the mining industry?

 

The rebate is granted only in respect of the following goods which are imported or taken out of Bond by persons engaged in the Mining Industry;

1. Eucalyptus, pine and other oils for use in the extraction of gold and other minerals by the flotation process;
2. Chemical substances, other than spirits, methylated spirits, fuel oils, lubricants and nitrate of lead, for use in any process for the concentration or refining of ore, or for assay or research purposes.

1. To benefit from this rebate, client should submit to the nearest ZIMRA office for onward transmission to the Regional office or direct to the Regional office, the documents listed below:
2. Application Letter

1. Letter of Undertaking to the effect that the articles shall be used solely for the purpose for which the rebate is granted and if they are sold or otherwise disposed of the duty rebated shall be paid forthwith to the Commissioner
2. Proforma Invoice showing the Full Description and Quantity of the Goods to be imported under the rebate
3. End User’s Certificate
4. A letter from the Mining Commission to Confirm the Existence of that Mine.
5. Current (Valid) Tax Clearance

At the time of the clearance of the goods, the importer shall be required to attach the Rebate Letter to the bill of entry form 21. The respective Regional Office shall issue a Rebate Letter specific to the Products listed in the Application and the Proforma Invoice.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

 

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority. 

Most taxpayers face challenges in resetting their passwords for e-services on ZIMRA portal. Detailed below are steps to follows. Kindly use the following Forgot/ Reset Password procedure and check for the default password in inbox or trash/junk folder: Visit the ZIMRA portal page on internet by typing http://efiling.zimra.co.zw on the internet browser and log-in to ZIMRA e-Services Portal Click on the “Forget Password” option, forgotten Password screen will come up Enter your email and Captcha (code for the image) Click on “Submit” and the security question which you provided on registration screen will come Enter the correct answer to the security question which you provided on registration and click on “Submit” A default password will be sent to the email stated on initial application, Use the default password to log in and you will be prompted to change the default password NB: Kindly note that when entering the default password:   highlight it with the mouse (no spaces before or after)    right click it,    copy,   go to the password field,   right click and    paste 8.     Enter the default password as your current password 9      Enter your new password and confirm it.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe. My Taxes, My Duties: Building my Zimbabwe!!   Disclaimer This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.

Presumptive Tax legislation was introduced to broaden the revenue base in view of the increase in informal business activities. Selected sectors of the economy were targeted to ensure the participation of informal businesses in tax payment in line with experiences of other developing countries. Details relating to the current rates and due dates of the various categories are shown below. 1.     Transport Operators’ Presumptive Tax With effect from 1 January 2022 the rates of Presumptive taxes were reviewed as stated in the tables below. Category Description ZWL Per Month   DUE DATE   Omnibuses     8 to 14 passengers 4,065 Within 20 days after the end of the quarter 15 to 24 passengers 4,875 Within 20 days after the end of the quarter 25 to 36 passengers 6,500 Within 20 days after the end of the quarter From 37 passengers and above 8,125 Within 20 days after the end of the quarter Taxi-Cabs All 4,065 Within 20 days after the end of the quarter Driving Schools Class 4 vehicles 48,750 Within 20 days after the end of the quarter Class 1 and 2 vehicles 65000 Within 20 days after the end of the quarter   Goods Vehicles   More than 10 tonnes but less than 20 tonnes 48,850 Within 20 days after the end of the quarter 10 tonnes or less but with a combination of truck and trailers of more than 15 but less than 20 tonnes 65,000 Within 20 days after the end of the quarter More than 20 tonnes 81,250 Within 20 days after the end of the quarter         With effect from 1 January 2015 ZINARA was appointed as an agent of ZIMRA for the collection of presumptive taxes in respect of transport operators, taxicabs and driving schools. Transport operators are supposed to have paid the full presumptive tax by the 20th day after the end of each quarter, however it can be paid on a monthly basis. The persons paying the presumptive tax have an option to pay in US$ at the auction rate prevailing on the date of transaction.  Other Presumptive taxes rates tables. Category Description ZWL 2022 DUE DATE Hair Saloons   4,065 per chair Within 20  days after the end of the quarter Restaurants and bottle stores   16,250 Within 10  days after the end of the quarter Cottage Industries   16,250 Within 10  days after the end of the quarter Ship, cruiser, boat, houseboat, speedboat, canoe Not more than 5 passengers 16,250 Within 10  days after the end of the quarter Of 6 passengers but less than 16 passengers 24,375 Within 10  days after the end of the quarter Of 16 passengers but less than 26 passengers 32,500 Within 10  days after the end of the quarter Of 26 passengers but less than 50 passengers 40,625 Within 10  days after the end of the quarter 50 or more passengers 48,750 Within 10  days after the end of the quarter Fishing rigs   16,250 Within 10  days after the end of the quarter Small scale miners   0% on the purchase price of precious metals or precious stones Within 30  days after buying the precious metals or precious stones Cross border traders   20% of VDP Immediately on importation Informal traders except Hair Saloons, Restaurants, bottle stores, Cottage Industries Rental income  3,250           Within 30 days from the date the amount is recovered         2. Hairdressing Salon Operators’ Presumptive Tax Every operator of a hairdressing salon is required to pay Presumptive Tax amounting to ZWL4, 065.00 per chair per month with effect from 1 January 2022 The full amount should have to be paid within 20 days after the end of the quarter. Amounts not paid by the due date are subject to interest charges. 3.     Informal Traders’ Presumptive Tax All persons in receipt of rental income from an informal trader in respect of residential accommodation, premises or a place on which trade is carried on are required to recover an additional amount by way of Presumptive Tax of  ZWL 3,250 on  rental  income with effect from 1 January 2022  and remit it  to ZIMRA This also includes local authorities. The amount should be remitted within 30 days from the date the amount is recovered. Failure to recover or remit the Presumptive Tax renders the lessor personally liable for the payment of the Presumptive Tax and a penalty of 100% of the amount due. Failure or refusal on the part of the informal trader to pay the Presumptive Tax constitutes a breach of the lease and allows the lessor to terminate the lease without notice. 4.      Small-Scale Miners’ Presumptive Tax With effect from 1st October 2014 Small Scale Miners Presumptive tax was reduced from 2% of the gross amount payable to 0% and the same rate still apply for 2022, therefore no Presumptive tax will be collected from Small Scale Miners. 5.      Cross-Border Traders’ Presumptive Tax Cross border traders who import commercial goods into Zimbabwe are required to pay a Presumptive Tax equal to 20% of the value for duty purposes (VDP) of the commercial goods. The only exception is cases where the trader is registered with ZIMRA for Income Tax purposes and is up to date with submission of tax returns and payment of all taxes due. 6.      Operators of Restaurants or bottle-stores Every operator of a restaurant or bottle store is required to pay Presumptive Tax amounting to ZWL16, 250 per month with effect from 1 January 2022. The full amount should have to be paid by the 10th day after the end of the quarter. Interest is chargeable on all amounts not paid by the due date. 7.      Cottage Industry Operators Every person who owns, is in charge of a cottage industry regardless of it being licensed, or not is required to pay Presumptive Tax amounting to ZWL16, 250 per month with effect from 1 January 2022. Cottage industry operators include those in the furniture making or upholstery trade, metal fabrication and any other cottage industry that the Minister may, by notice in a statutory instrument, prescribe. The full amount should have to be paid by the 10th day after the end of the quarter. Interest is chargeable where the amounts due are not paid by the due date. 8. Commercial Waterborne vessels Presumptive Tax is charged to operators of commercial waterborne vessels used for the carriage of passengers for profit and fishing rigs. The full amount of presumptive tax shall be remitted by the 10th day after the end of each quarter, however operators can still remit on monthly basis. The rates are shown in the table below with effect from 1 January 2022. Rates of presumptive tax for self-employed professionals   With effect from 1 January 2022 the rates of Presumptive tax for Self-employed professionals     Self-employed professionals ZWL per month DUE DATE Architects 406,000 Within 30  days after the end of the quarter Engineers or Technicians 812,500 Within 30  days after the end of the quarter Legal Practitioners 812,500 Within 30  days after the end of the quarter Health practitioners 812,500 Within 30  days after the end of the quarter Real estate agents 1,625,000 Within 30  days after the end of the quarter

What is a non – executive director?

• A non-executive directoris a member of a company's board of directors who is not part of the executive team. A non-executive director typically does not engage in the day-to-day management of the organization but is involved in policymaking and planning exercises.

 

Are Non – executive Directors’ Fees subject to withholding tax?

• If no other amount constituting remuneration is payable to the director by the corporate body, the non – executive directors’ fees are subject to Withholding Tax on Directors’ fees.

Who withholds tax on the Non – executive Directors’ fees?

• The tax is deducted and remitted to the Commissioner by the company paying the fees, within ten days of the date of payment.

What is the rate of the Withholding Tax on Non – Executive Directors’ Fees?

• The director’s fees payable to non-executive directors are subject to 20 percent withholding tax in terms of the 33rd Schedule of the Income Tax Act.

When and how should the withholding tax on non- executive directors’ fees be remitted to ZIMRA?

• The tax is deducted and remitted to the Commissioner by the company paying the fees, within ten days after the date of payment

Are there any other tax requirements for Non – executive directors’ fees besides the Withholding Tax on directors’ fees?

• With effect from 1 January 2020, fees accruing to a non-executive director are now subject to a final withholding tax of 20%.
• This means non-executive directors are no longer required to pay Quarterly Payment Dates (QPD) on the directors’ fees or declare the fees on Income Tax.
• With effect from 1 January 2020, non – executive directors are no longer required to produce a tax clearance certificate upon receiving fees.
• In cases where the non-executive director earns or is entitled to an amount equal to ZWL4, 800,000.00 in respect of fees or other business income, in a tax year, they must register for VAT in terms of the VAT Act [Chapter 23.12]. In such a case, the director will be liable to pay and file VAT returns.

This tax treatment for non-executive directors fees applies to what type of companies?

• The taxation requirements of non-executive directors as highlighted above applies to non – executive directors employed by private, public and statutory corporations.

Penalties and interest for late remittances of tax

 

• Taxpayers are encouraged to pay their taxes on time and in full in order to avoid unnecessary penalties and interest, which are levied on latepayments.

It is a requirement that all vehicles being imported into Zimbabwe from countries which experienced nuclear incidents be inspected for radiation contamination.  The requirement is in terms of Statutory Instrument 281 of 2020; Radiation Protection (Safety and Security of Radiation Sources) (Amendment) Regulations 2020 (No.5).

Affected vehicles

Persons who import motor vehicles into Zimbabwe from countries that have experienced nuclear disasters directly or indirectly are required to submit Form RP1 which is a declaration of inspection for radiation contamination of vehicles. The form should be submitted at the Port of Entry to officers of the Radiation Authority of Zimbabwe (RPAZ), prior to clearance of the motor by the Zimbabwe Revenue Authority.

Testing procedure

A prescribed fee will be paid before tests are conducted for radiation contamination by officers of the Radiation Authority of Zimbabwe (RPAZ). A certificate of non-contamination is issued by RPAZ for a motor vehicle free of radiation. RPAZ officers shall de-contaminate any vehicles found to be contaminated at a prescribed fee to be paid by the importer.

Clearance procedure

The certificate of non-contamination together with import documents such as invoices consignment notes, bills of lading are then presented to the Zimbabwe Revenue Authority officials for customs clearance of the vehicle.

 

NB: Any person who fails to submit the Form RP1 at the port of entry and/or fails to ensure the vehicle is subjected to radiation contamination inspection or any person who makes a false statement or declaration or falsifies any documents concerning the country of origin of a vehicle shall be guilty of an offence and liable to a fine not exceeding level 5 or imprisonment for a period not exceeding six months or both such fine and such imprisonment.

The Customs and Excise Act stipulates requirements on clearance of goods on import, export and on excisable goods. This is in line with its mandate to collect revenue, facilitate trade and travel, advise government on fiscal and economic matters and protection to civil society.

Part XIII of the Customs and Excise Act CAP 23.02 deals with Offences and their penal provisions so it is important for Clearing Agents, Importers and Exporters to familiarise themselves with this Part of the Act. It is however important to know that other offences are also covered in other parts of the Customs and Excise Act and in the Customs and Excise General Regulations. Knowing what constitutes an offence in the Customs and Excise Act helps businesses avoid unnecessary fines, which are an irrecoverable cost to them.

Statutory Instrument 25 of 2021 reviewed the fines as follows with effect from 25 January 2021;

LEVEL	MONETARY AMOUNT(ZWL$)
1	1000
2	2000
3	5000
4	20 000
5	30 000
6	60 000
7	120 000
8	200 000
9	240 000
10	280 000
11	400 000
12	800 000
13	1 200 000
14	1 600 000

 

Example 1

Failure to comply with import controls as stipulated in Section 48 of the Customs and Excise Act CAP 23.02 attracts a level 12 fine of ZWL800 000. *N.B. controls are not on quantity but on the nature of the product.

 

 

 

Example 2

Failure to preclear commercial goods as prescribed in Section 18(12) of the Customs and Excise General Regulations SI 154 of 2001 (as amended) attracts a level 7 fine of ZWL120 000.

Other examples of common offences that may attract heavy fines as stipulated in the above SI which many importers, exporters, travelers and clearing Agents ignore include (but are not limited to) the following:

• Making false statements or false declarations to Customs
• Producing false invoices or documents with the intention to deceive Customs Officials or evading payment of full duty.
• Importation or possession of blank invoices
• Smuggling
• Availing one’s vehicles for use in smuggling activities.
• Removing labels, marks or seals to deceive Customs
• Importing controlled goods without the required permit.

Importers are therefore urged to comply with the provisions of the Customs and Excise Act in order to facilitate trade and in the process avoid incurring extra costs in fines and inconveniences due to delays at the time of importation.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

 

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.